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PO Box 78408  Baton Rouge, LA  70837  

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Sample Planning Output

A financial plan is an extremely personalized document containing a wide variety of information. Below are a few samples of common output.

Financial Statement (Net Worth)

This is the backbone of the financial planning analysis and is updated on an annual basis. On the left is a detailed financial statement and next to it is a graphical overview.

 

Cash Flows

The top graph represents projected future cash flows (the inflows are shown in green and the expenses are red).

The bottom graph shows the net effect. The red indicates the amount of dollars which may need to withdrawn from the portfolio to meet future expenses. Detailed pages are also included in the final document.

 

Debt Ratios

Managing debt is an extremely important part of the financial picture. Maintaining appropriate debt ratios are key. The graphs below show the current ratio, the ideal range, and the projected future ratio.

 

Asset Values and The Safe Withdrawal %

This is the first glance at the possibility of running out of money. The bottom graph (Safe Withdrawal) shows withdrawals are exceeding the Safe Withdrawal % and provide an early warning signal (for more on this see the next sample).

 

What's the Probability of Running Out of Money?

This is an extremely relevant question to many individuals. Using one of the most advanced analysis tools available, this probability is assessed for three different points in time. If the probability is too high, we will tweak the analysis in an attempt to reduce this likelihood.

Ultimately, we will perform an optimization to determine what level of annual expenditures will bring this probability down to an acceptable level.

 

Portfolio Probabilities

What's the probability of negative returns for the portfolio? This extremely important question is analyzed for annual, 5-year, and 10-year periods using the same advanced technology as in the previous sample.

 

Required Rate of Return

This is perhaps, the single most important issue for many individuals for a number of reasons. First, knowing the required rate of return is necessary when managing money. Without it, how would you know what return to target? Next, it provides a benchmark for the future. For example, if the required rate of return were 6.25% (as it is in the sample below), and the portfolio's actual return for the next 12 months exceeded this, then the required return needed in the future would be lower. If the required return were lower, the risk in the portfolio could also be reduced. This premise assumes other aspects of a client's situation have not changed (expense need, savings level, etc.). This is an ongoing process and is reassessed whenever the financial plan is updated.

 

Estate Summary

The following graphs show the combined estate, the balance between spouses, and the liquidity, or ability to meet final expenses, including the Federal Estate Tax.

 

The Estate Value, the Federal Estate Tax Exemption, and the Probate Estate

With the changing estate tax exemption, the top graph provides an indication as to whether the projected estate is expected to exceed the estate tax exemption in future years.

The bottom graph divides the part of the estate which is subject to probate.

 

Probability of Exposure to the Federal Estate Tax Plus Legacy Probabilities

How probable is it that your estate will exceed the Federal Estate Tax threshold (graphs two and three)? What is the probability of leaving a desired legacy, in terms of value (top graph)? These questions are addressed in our financial planning analysis.

 

Click here to see sample investment reports